Substack latest. Do you want to feed the unhungry in a leftist seminary?
Comments and replies:
Tony: One of the best, and certainly the most concise, essays on the problem. The mild criticism when I was at NYU was that the universities were offering "higher skilling." Higher infantilization was right around the corner.
Bill: Thanks, Tony. One could go on to mention what a lousy deal a college degree is these days: as the quality goes down, the price goes up. And then the trifecta of corruption: overpaid do-nothing administrators pushing the destructive DEI agenda; federally insured loans without oversight; stupid students and their parents who go into deep debt for something of little or no value. One absurdity leads to another: bad financial decisions are then to be rewarded by student loan forgiveness! Let the waitresses and the truck drivers pick up the tab. The law, unmoored from morality, and positively promotive of immorality, becomes a mere power tool for the advancing of the interests of amoral if not immoral elites. Talk about moral hazard!
Tony: Which connects to the inherently fraudulent banking system and the Ponzi scheme called Social Security. A perfect storm of moral hazards.
Bill: I agree. But permit me a quibble. Ponzi schemes are set up with fraudulent intent. The SS system was not so set up. Initially, at least, it was reasonable and well-intentioned: to keep workers from ending up in the gutter, subsisting on cat food. It was insurance against destitution, and like all insurance, the premiums were relatively small. Of course, it soon enough transmogrified into an ultimately unsustainable retirement program. My main point at the moment, however, is the pedantic one that SS is not a Ponzi scheme strictly speaking. But it may be more than pedantic inasmuch as lefties could take it as a smear against SS as opposed to a legitimate criticism. Or as I put it about a dozen years ago, though not in a reply to Tony Flood:
Language matters. Precision matters. And if not here, where? If you say what you know to be false for rhetorical effect, then you undermine your credibility among those whom you need to persuade. Conservatives don't need to persuade conservatives, and they will not be able to persuade leftists. They must pitch their message to the undecided who, if rational, will be put off by sloppy rhetoric and exaggeration.
I note that W. James Antle, III, the author of the linked article, refers to the SS system as "the liberals' Ponzi scheme." But of course it is not a Ponzi scheme. A Ponzi scheme, by definition, is a scheme set up with the intention of defrauding people for the benefit of those running the scheme. But there is nothing fraudulent about the SS system: the intentions behind it were good ones! The SS system is no doubt in dire need of reform if not outright elimination. But no good purpose is achieved by calling it a Ponzi scheme. That's either a lie or an exaggeration. Not good, either way. The most you can say is that it is like a Ponzi scheme in being fiscally unsustainable as currently structured. Why not make the point accurately without a distracting rhetorical smear? Conservative exaggeration is politically foolish. Is it not folly to give ammo to the enemy? Is it not folly to choose a means (exaggeration and distortion) that is not conducive to the end (garnering support among the presently uncommitted)?
Tony: I take your point about imputing ill-intent, but the passive voice of the "SS system was not so set up" (as a Ponzi scheme) obscures agency and its motives (which you were not writing an essay about). Before the Social Security Act of 1935 there was the Federal Reserve Act of 1913, which was not hatched overnight. The conspiracy to nationalize US banks was at least a decade in the making. The propaganda seeding the mass media (as today, post-SVB collapse) was that there's nothing worse than a bank run or "panic" (or is it a "threat to public health"?). That line served those who wanted to bring banking under governmental control (with the bankers overseeing the government). The easy money of the '20s led to the crash that engendered the destitution you referenced. Intelligent people engineered the FRA, and equally intelligent, educated, sober, well-meaning people came up with the SSA (and other agencies) to address the former's unforeseen consequences. Their ideological heirs now prevent the inevitable insolvency of SS with easy money: the central bank writes a check to itself with "our" money (denominated in federal reserve notes), postponing the day of reckoning. My issue is moral hazard, and one seems to engender another. As Tucker reminded us last night, the bankers effed up, but none went to prison. The government moved heaven and earth to shore up the same morally hazardous system because, as all the right people know, "there's no alternative." As I wrote in Christ, Capital & Liberty:
Just as advances in technology decreased the fear of “getting caught” consuming pornography, so did the central bank in the financial markets decreased the fear of suffering losses for making bad loans. As Peter Schiff put it regarding the 2008-2009 Meltdown:
Just as prices in a free market are set by supply and demand, financial and real estate markets are governed by the opposing tension between greed and fear. Everyone wants to make money, but everyone is also afraid of losing what he has. Although few would ascribe their desire for prosperity to greed, it is simply a rose by another name. Greed is the elemental motivation for the economic risk-taking and hard work that are essential to a vibrant economy. [Peter Schiff, “Don’t Blame Capitalism,” The Washington Post, October 16, 2008.www.washingtonpost.com/wp-dyn/content/article/2008/10/15/AR2008101503166.html
But over the past generation, government has removed the necessary counterbalance of fear from the equation. Policies enacted by the Federal Reserve, the Federal Housing Administration, Fannie Mae and Freddie Mac (which were always government entities in disguise), and others created advantages for home-buying and -selling and removed disincentives for lending and borrowing. The result was a credit and real estate bubble that could only grow—until it could grow no more. [CCL 126-127]
I'll stop here before I write an essay!
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